Gerencia de Proyectos de Construcción y Tecnología

The art of Forecasting

(traducción en español debajo)

One of the most common mistakes made in construction projects is to rely on an “accounting control” as your cost control index. Accounting control is the subtraction of income – expenses and even when it seems to make sense, it really doesn’t.

In a construction projects, there are so many variables that we can not base the cost control by only focusing on incomes and expenses. There are change orders, extraordinary costs, un-foreseen and scope changes. All this affects the project’s cost in such a way that an accounting “control” is insufficient to predict how the project will finish.

Accounting control is a “square” control that you will never know how your work is going, it is even dangerous to use as an indicator of your project status.

A “cost control”, however, will forecast. There is a very good practice in construction known as “ACR” (Anticipated Cost Report), which tracks your project and forecasts its result in short and long term. It begins with making a good schedule, having the most accurate progress reports as possible, and also recording changes and while keeping an eye on contingencies, in summary, it is the result of many other processes and procedures.

The risks of not using a proper cost control could be disastrous, it’s just like walking down a street in Mexico City, because you actually do not know until you get hit, and believe me, you try to walk the streets in Mexico City and you will get hit if you are aware.

Remember, the construction is a living organism, it constantly changes. A good manager must be able to predict and use his intuition, on how, when and where this organism is moving to push it right back on track before it’s too late.

Based in Mexico, Damián Pizá, is a Certified Construction Manager; Civil Engineer; he studied his Masters in Construction Management at the UT @ Arlington; LEED AP; OSHA +30; Member of the CMAA (Construction Management Association of America); Member of the Emergent Technology Committee

Founder of PIZA Consulting, company that specializes in developing and providing Project Management Office (PMO) as its PM/CM Service as well as BIM for Management Purposes.